1- Depends on what sort of budget you have and where you plan on eating. Some places are very inexpensive, others not. Personally, I would plan on $100 a day for two people for food, entrance fees, etc. (not hotel though).
2- I carry dollars and exchange them as I go, or in one lump. It will not be hard to exchange them in any main tourist area. Euros are fine too, if you already have them.
3- I always change a little money at the airport- despite the horrible exchange rate. I use this for transportation, food that day, etc. The one time I did not do this was in Russia, and when I got into Moscow, there were no banks open, no ATM's would accept my debit or ATM cards, and no places took credit cards. I eventually found a questionable money changer down a dark hallway in a train station. At least I could eat something! That's when I learned my lesson.
Enjoy your trip, Turkey is amazing!